NON-COMPETITION AGREEMENT
This Non-Competition Agreement ("Agreement") is being entered into this 30th day
of September, 2000 by and among PLM International, Inc., a Delaware corporation,
PLM Rental, Inc, a Delaware corporation, PLM Transportation Equipment Corp., a
California corporation, TEC AcquiSub, Inc., a California corporation, and PLM
Financial Services, Inc., a Delaware corporation, as the manager of and on
behalf of Professional Lease Management Income Fund I, L.L.C., a California
limited liability company ("LLC"), and as general partner for and on behalf of
PLM Equipment Growth Fund, PLM Equipment Growth Fund II, PLM Equipment Growth
Fund III, PLM Equipment Growth Fund IV, PLM Equipment Growth Fund V, PLM
Equipment Growth Fund VI, and PLM Equipment Growth and Income Fund VII, each a
California limited partnership (collectively, "Seller"), and Marubeni America
Corporation, a New York corporation ("Buyer"), and is made with reference to the
following facts:
A. Pursuant to that certain Asset Purchase Agreement (the "Purchase
Agreement"), dated as of May 24, 2000, between PLM, PLM Rental, PLM TEC, TEC and
Buyer, as well as the Partnerships Asset Purchase Agreement, between the
Partnerships and Buyer, Buyer has agreed to purchase from Seller and
Partnerships certain assets and goodwill as described in Section 3.18 of the
Purchase Agreement (the "Acquisition"), and Buyer seeks to protect such assets
and goodwill; and
B. Seller has had access to business secrets and confidential
information of the Business, which are proprietary to the Business. The use of
such business secrets and confidential information of the Business by any of the
Business's competitors would be irreparably damaging to the Business. It would
be extremely difficult for Seller to become affiliated with those entities
engaged in the activities described in Section 1 below without making unlawful
use of such business secrets and confidential information, since the business
secrets and confidential information would be immediately applicable to and of
great value to the businesses of those entities. Any such use of the business
secrets and confidential information of the business would materially and
adversely impact the value of the Business purchased by Buyer through the
Acquisition.
C. As an inducement to Buyer to acquire the Business via the
Acquisition, each Seller has agreed to preserve and protect the goodwill,
business secrets and confidential information of the Business by agreeing to the
covenants set forth below.
D. Each Seller acknowledges and agrees that the Business presently
carries on business in all cities, counties and countries identified in the
Specified Region (as defined in Schedule A).
In view of the foregoing and for good and valuable consideration,
receipt of which is hereby acknowledged, each Seller covenants and agrees with
Buyer as follows:
1. ACTIVITIES SUBJECT TO AGREEMENT. For the Covenant Period (as
defined in Section 2), each Seller will refrain, within the Specified Region,
from (a) engaging in any competitive activity with any refrigerated and dry van
over-the-road trailer leasing operations (excluding intermodal trailers), (b)
soliciting for employment, or recommending for employment (other than by Buyer)
any New Hire, or (c) diverting or attempting to divert from Buyer or any
affiliate of Buyer any business of any kind in which the Business is engaged,
including, without limitation, the solicitation of or interference with any
suppliers, contractors or customers. Notwithstanding the foregoing, it shall not
be a breach of this Agreement for Seller to own, as a passive investment, not
more than five percent (5%) of the outstanding stock of any corporation having
securities listed on the New York Stock Exchange, the American Stock Exchange,
or traded on NASDAQ, that carries on activities prohibited to Seller hereunder
and the foregoing provisions shall (x) with respect to the Partnerships and PLM
FSI, not restrict any such Seller from owning Equipment which is leased to or
managed by a third party who is not an Affiliate of any such Seller or PLM FSI,
so long as such Seller or PLM FSI are not involved in the day to day use,
operation, rental or maintenance of such Equipment, and (y) with respect to each
Seller, not restrict Seller from being acquired by any other person or entity
that prior to the date of such acquisition is already engaged in an activity
that is competitive with the trailer leasing operations that are the subject of
the Purchase Agreement and the Partnerships Asset Purchase Agreement, and which
after the date of such acquisition without use of any name including the word
PLM may engage in an activity that is competitive with any trailer leasing
operations that are the subject of the Purchase Agreement and the Partnerships
Asset Purchase Agreement.
2. COVENANT PERIOD. The Covenant Period shall automatically terminate
if neither Buyer nor any division, subsidiary or affiliate of Buyer nor any
successor or assignee of Buyer nor any other person deriving title to the
goodwill of the Business, carries on the business formerly conducted by the
Business or any trailer leasing operations in the Specified Region. Subject to
the foregoing sentence, the Covenant Period shall extend for a period not longer
than five (5) years from the Closing Date. Buyer and Seller agree that the
Covenant Period as described above is reasonable and is necessary to protect the
value of the Business that Buyer is purchasing via the Acquisition. In the event
that, contrary to the intent of the parties, a court should determine that the
covenants of Seller herein may not be enforced throughout the full length of the
Covenant Period, the parties agree that the Covenant Period shall be deemed
amended to the longest period (not exceeding that set forth in this Section 2)
that is permissible.
3. SPECIFIED REGION. Carrying on a business within the Specified
Region shall include, without limitation, any of the following: maintaining
office, manufacturing, assembly, distribution, research, design, sales or other
facilities within the Specified Region, soliciting sales within or into the
Specified Region, or obtaining supplies, materials or services within or from
the Specified Region. Each Seller acknowledges that the Business has been
carried on throughout the Specified Region.
4. ASSIGNMENT BY BUYER. In the future, Buyer may choose to assign all
or substantially all of the assets of the Business to some other affiliate of
Buyer. It is the parties' intention that those covenants of Seller shall inure
to the benefit of the Buyer, any affiliate of Buyer, or any other person or
entity that may succeed to the Business (acquired by Buyer under the Purchase
Agreement and the Partnerships Asset Purchase Agreement) with the same force and
effect as if these covenants were made directly with such successor. The parties
agree that the covenants of Seller contained herein may be assigned by Buyer to
any person or entity to whom may be transferred the Business of the Buyer by
sale of stock, sale of assets, merger, consolidation or otherwise.
5. REMEDY FOR BREACH. The parties agree that, in the event of breach
or threatened breach of Seller's covenants herein, the damage or imminent damage
to the value and the goodwill of the Business will be irreparable and extremely
difficult to estimate, making any remedy at law, in equity or in damages
inadequate. Accordingly, the parties agree that Buyer and its affiliates shall
be entitled to injunctive relief against Seller in the event of any breach or
threatened breach of any of such covenants by Seller, in addition to any other
relief (including money damages) available to the Buyer under this Agreement,
under law or in equity. Seller agrees that the remedy at law or in equity for
any breach by Seller of this Agreement will be inadequate and that Buyer and its
affiliates shall be entitled to injunctive relief.
6. SEVERABILITY. It is the understanding of the parties that the scope
of the covenants contained herein, including as to time, geographic area and
activities covered, are necessary to protect the reasonable expectations of
Buyer in connection with its acquisition of the Business and the goodwill that
is a part of the Business acquired pursuant to the Purchase Agreement and the
Partnerships Asset Purchase Agreement. It is the parties' intention that these
covenants be enforced to the greatest extent in time, area, and activities
covered as is permitted by the law or in equity. The parties intend that the
unenforceability or invalidity of any term or provision of this Agreement shall
not render any other term or provision contained herein unenforceable or
invalid. If the business activities, period of time or geographical area covered
by this Agreement shall be deemed too extensive, then the parties intend that
this Agreement be construed to cover the maximum scope of business activities,
period of time and geographical area (not exceeding those specifically set forth
herein) as may be permissible under applicable law or in equity.
7. SEVERAL LIABILITY AND JOINT AND SEVERAL LIABILITY. Each Seller is
severally liable for its obligations under this Agreement. In addition, each of
PLM, PLM Rental, PLM TEC and TEC (the "Corporate Sellers") are jointly and
severally liable for its obligations as well as the obligations of each of the
other Corporate Seller's obligations under this Agreement. PLM is jointly and
severally liable for its obligations as well as the obligations of each of the
other Seller's obligations under this Agreement; provided, however, that, with
respect to the Partnerships, PLM's liability for the obligations of any given
Partnership shall cease as of the day on which such Partnership ceases to have
PLM or any of PLM's direct or indirect subsidiaries as a general partner of the
Partnership or, in the case of LLC, as the manager.
8. DEFINITION. Capitalized terms used and not otherwise defined in
this Agreement (including the schedules hereto) shall have the respective
meanings assigned to such terms in the Purchase Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
MARUBENI AMERICA CORPORATION
By: /s/ Toru Nishimi
Name: Toru Nishimi
Title: SVP
PLM INTERNATIONAL, INC.
By: /s/ Susan Santo
Name: Susan Santo
Title: VP
PLM RENTAL, INC.
d/b/a PLM TRAILER LEASING
By: /s/ Susan Santo
Name: Susan Santo
Title: VP
PLM TRANSPORTATION EQUIPMENT CORP.
By: /s/ Susan Santo
Name: Susan Santo
Title: VP
TEC ACQUISUB, INC.
By /s/ Susan Santo
Name: Susan Santo
Title: VP
PLM FINANCIAL SERVICES, INC.
By: /s/ Susan Santo
Name: Susan Santo
Title: VP
PROFESSIONAL LEASE MANAGEMENT
INCOME FUND, LLC
By: PLM Financial Services, Inc.
By: /s/ Susan Santo
Name: Susan Santo
Title: Its Sole Manager
PLM EQUIPMENT GROWTH FUND
By: PLM Financial Services, Inc.
By: /s/ Susan Santo
Name: Susan Santo
Title: Its General Partner
PLM EQUIPMENT GROWTH FUND II
By: PLM Financial Services, Inc.
By: /s/ Susan Santo
Name: Susan Santo
Title: Its General Partner
PLM EQUIPMENT GROWTH FUND III
By: PLM Financial Services, Inc.
By: /s/ Susan Santo
Name: Susan Santo
Title: Its General Partner
PLM EQUIPMENT GROWTH FUND IV
By: PLM Financial Services, Inc.
By: /s/ Susan Santo
Name: Susan Santo
Title: Its General Partner
PLM EQUIPMENT GROWTH FUND V
By: PLM Financial Services, Inc.
By: /s/ Susan Santo
Name: Susan Santo
Title: Its General Partner
PLM EQUIPMENT GROWTH FUND VI
By: PLM Financial Services, Inc.
By: \s\ Susan Santo
Name: Susan Santo
Title: Its General Partner
PLM EQUIPMENT GROWTH AND INCOME
FUND VII
By: PLM Financial Services, Inc.
By: \s/ Susan Santo
Name: Susan Santo
Title: Its General Partner
SCHEDULE A
SPECIFIED REGION
Anywhere in the world that the Business presently carries on or has
carried on its operations. Without prejudice to the foregoing, it is hereby
expressly acknowledged and agreed by Seller that the Business presently carries
on or has carried on its operations in each of the 58 counties of the State of
California and all of the other 49 states and the District of Columbia of the
U.S.A..